Expanded Operating Expenses Block Grant. User Guide. for Aided Schools. which have established an. Incorporated Management Committee (IMC)

Transcription

1 Expanded Operating Expenses Block Grant User Guide for Aided Schools which have established an Incorporated Management Committee (IMC) Education Bureau Updated in August 2014

2 CONTENTS PURPOSE 3 FEATURES 3 PRINCIPLES AND RULES ON USAGE 4 COMPUTATION AND ADJUSTMENT 6 ACCOUNTING ARRANGEMENTS 8 Page ANNEXES A List of Grants under EOEBG in Aided Schools B List of Grants under EOEBG in Aided Special Schools C An illustration of how the PF/MPF contributions will be met by the subsidy from the EDB and from the school's own funds D Guidelines for calculating the Severance Payment and Long Service Payment for staff paid under EOEBG 2

3 Purpose Expanded Operating Expenses Block Grant (EOEBG) User Guide The EOEBG aims at providing Incorporated Management Committee (IMC) schools with more financial autonomy in the deployment of funds for educational purposes. Features 2. The EOEBG is provided to aided schools in the school year following their establishment of the IMCs. More non-salary recurrent grants that are formerly outside the Operating Expenses Block Grant (OEBG) are included in the EOEBG. The full list of constituent grants under the EOEBG is set out at Annexes A and B. The EOEBG includes virtually all non-salary recurrent grants to aided schools, except those which are ad-hoc in nature, those which are currently under review, and those which are paid for very specific purpose on a reimbursement basis. The demarcation between the General Domain and Special Domain adopted in the OEBG is removed in the EOEBG, with the exception of some specified grants e.g. Capacity Enhancement Grant. The EOEBG is provided as one block grant and schools are free to deploy the funding flexibly. 3. Similar to the OEBG, schools may use the surplus under the EOEBG on items chargeable to other Education Bureau (EDB) subsidies outside the EOEBG. In addition, schools may use the surplus to top up non-recurrent expenses for projects approved/funded by EDB. However, schools should not take out a large amount of surplus under the EOEBG to top-up a single project, which might affect the opportunity for students to enjoy other educational resources they are entitled to. Subject to certain limits, schools may also use the surplus to top up recurrent expenses arising from other government-funded projects, furniture and equipment and other facilities or educational services acquired through private donations or other fund-raising schemes. 4. The computation and annual adjustment of provision of the EOEBG are simplified and based mostly on the number of approved classes, except for some school specific grants. School specific grants are grants that are of special nature and only applicable to selected schools with special circumstances. They will continue to be determined separately in accordance with the prevailing criteria applicable to each of these grants. Ambit 5. The EOEBG covers ambits of all its constituent grants. It can be used for purposes related to teaching and learning, operation and development of the schools. For example, schools may use the EOEBG to cover expenditure incurred from operating cost such as telephone and electricity charges of the schools, procurement of consumables and teaching aid, conduct of educational programmes for their students, 3

4 hiring of staff outside permanent staff establishment, procurement of stores, furniture and equipment, cleansing, security and other necessary services. It can also be deployed to finance professional development for their teaching staff and other educational purposes endorsed by the IMCs. For employment of staff, all expenditure related to salaries, leave entitlement and statutory benefits such as Mandatory Provident Fund (MPF), Long Service Payment and Severance Payment can also be covered by the EOEBG. Principles and rules on usages 6. In exercising the flexibility in the use of resources, schools are required to consider carefully the interests of both students and staff. The annual provision of government subvention should be sufficient for schools to cover all operating expenditure. Schools should have sound financial planning and good budgeting in utilizing government funding in order to meet the needs of current students as well as school development and various policy priorities. While schools may retain up to twelve (12) month s provision under the EOEBG, they are not expected to keep too much surplus without specific purposes. Schools are reminded to deploy their resources in a cost-effective and timely manner and to ensure that expenditures incurred are reasonable and necessary for educational purposes. Starting from the 2012/13 school year, schools may use the surplus of the EOEBG for the payment of statutory holidays/annual leave arising from the following types of specific no-pay leave 1 for their staff remunerated under Salaries Grant : (a) no-pay sick/maternity/special tuberculosis leave (referred to as no-pay sick leave); (b) no-pay study leave for attending education-related courses; (c) no-pay leave granted due to poor health condition with medical documentary proof; and (d) no-pay leave granted for alleviating the redundancy problem of an individual school/schools under the same Sponsor (prior confirmation from the School Development Officer concerned is required). For no-pay leave other than the above listed, schools should take own responsibility to fulfill all statutory requirements including meeting any possible expenditure out of non-government funds. 7. Schools must not use the provision to procure services or materials merely to drill students for assessments. Expenditures on celebration, entertainment, flower baskets, fruit baskets, wreaths and all other similar items for ceremonial activities or tributes to other schools should be kept to the absolute minimum. When procuring furniture and equipment items, schools should observe the principles of prudence and 1 Prevailing procedures should be followed in approving no-pay leave to staff in schools. Schools should retain all supporting documents for payment arising from the above specific no-pay leave for record and inspection, if required. 4

5 propriety in the management of resources and have proper checks and balances to safeguard the use of funds in view of their future development. In addition, schools must ensure that any recurrent consequences arising from exercising funding flexibility will be absorbed within the EOEBG or met by schools own funds. 8. In utilizing the funding flexibility of the EOEBG, schools are requested to take notice of the following: a. Schools should ensure that the total spending should be kept within the amount of provision and avoid deficits as far as possible. Any deficits arising should be borne by the school s own funds. b. Subsidy will continue to be provided for Provident Fund (PF)/MPF contributions in respect of janitors, clerical and other supporting staff employed within the provision allocated for the school-specific Administration Grant/Revised Administration Grant. (An illustration of how the PF/MPF contributions will be met by the subsidy from the EDB and from the school's own funds is at Annex C.) c. Surplus under the EOEBG can be used to top up no more than: i. 50% of recurrent cost arising from government-funded projects e.g. maintenance fee for computers bought with the Quality Education Fund; and ii. 25% of recurrent cost arising from furniture and equipment and other facilities or educational service acquired through private donations or other fund-raising schemes e.g. expenses on toner for printers from private donations. In this connection, schools are required to establish proper procedures, objective criteria and clear approving authority for transferring the surplus out of the EOEBG. 9. If schools deploy the school specific grants such as Capacity Enhancement Grant or Administration Grant/Revised Administration Grant or provision of baseline reference under the EOEBG to employ staff, they should set aside part of these grants/provision of baseline reference for the payment of Severance Payment/Long Service Payment 2 as outstanding commitment. In case the funds are insufficient to settle the payment, schools may deploy surplus under the EOEBG to cover the deficit. Schools should keep a separate ledger for the Severance Payment/Long Service Payment and work out the amount payable to each staff concerned on their cessation of service. (Guidelines for calculating Severance Payment/Long Service Payment at Annex D). 2 Separate subsidies are provided to aided primary, aided secondary and special schools to pay the Long Service Payment for non-teaching staff employed under Administration Grant/Revised Administration Grant. Aided primary and special schools may also claim reimbursement of the Severance Payment for these staff following the prevailing procedures. As for aided secondary schools, the Severance Payment of the non-teaching staff should be paid through Administration Grant, which is not reimbursable. 5

6 10. Schools are reminded that non-education related expenditures as listed below are not allowed to be charged to the EOEBG: i. fringe benefits/welfare for staff, including housing benefits, provision of food or food allowance, travelling allowance, medical expenses, etc.; ii. entertainment expenses such as lunch/dinner for staff not related to discharge of duties 3 ; iii. loans to staff or third parties; iv. administrative and management expenses, including salaries of staff, of the headquarters or other service units of the school sponsoring body; v. donations; and vi. any other items announced via Circular/Circular Memorandum issued by EDB from time to time. In the event that expenditure is found improperly charged to the EOEBG, EDB shall request the school concerned to explain the anomalies. In the absence of acceptable explanation, the school should make good such expenditure by charging it to its own funds. Computation and adjustment 11. For existing aided schools, the EOEBG will apply starting from the next school year following the establishment of IMC. For new schools, the EOEBG will apply when the schools come into operation. 12. For existing and new schools, the level of provision is normally computed as follows: (i) for existing schools A snapshot of the aggregate of prevailing provision of the constituent grants, other than the school-specific grants mentioned above, of each school concerned in the immediate past school year before the application of the EOEBG will be taken. This snapshot will be taken as level of provision and known as the Baseline Reference. In subsequent years, the Baseline Reference will be adjusted in accordance with the June-on-June movement of the Composite Consumer Price Index (CCPI) each year as well as the change in the number of approved classes multiplied by the Average Per Class Rate at the time. That is, 3 As a guiding principle, entertainment expenses such as lunch/dinner for staff should not be charged to the EOEBG or any school funds account. However, under school-based management, the IMC may approve expenses on entertainment according to the needs and policy priorities of the school on condition that the expenditures incurred are reasonable and necessary for educational purposes and met with in a cost-effective manner. In this connection, the expenses in respect of breakfasts/lunches/dinners incurred by school staff in relation to their discharge of duties in major school functions such as School Anniversary Dinner, Parent Teacher Association Annual Dinner etc can be charged to the EOEBG. Schools are required to avoid lavishness and to make conscientious decision in providing such expenses. The limits of such expenses per occasion and per head are $150 for breakfast, $350 for lunch and $450 for dinner with service charge and tips included. The IMC is required to provide full justifications if the expenses exceed these limits. 6

7 Provision of EOEBG = Baseline Reference + School Specific Grants where Baseline Reference = Original Baseline Reference annually adjusted by CCPI + Per Class x Rate Change in number of classes However, if schools undergo major changes such as reprovisioning of school premises, the Baseline Reference may be duly adjusted to reflect the latest development or the computation method for new schools may be applied. (ii) for new schools For a new aided school, the level of provision will be determined by a Basic Provision (A) and the Average Per Class Rate (B) multiplied by the number of approved classes (N). That is, Provision of EOEBG = A + B x N + School Specific Grants 13. The values of the A, B and rates for school specific grants will also be adjusted by the CCPI. Schools may refer to for the up-to-date rates of A and B. In addition, the Permanent Secretary for Education (PS(Ed)) may adjust these rates as the situation merits, e.g. schools having more than one lift incurring higher maintenance charges, with the Set-up Fund account not being closed or whether the school is fee-charging or not. Option for developing schools 14. For aided schools that are newly operated or in the midst of their development stage and have yet to attain the full range of levels of classes, they may opt for the method for the new schools or continue to adopt the method for the existing schools when they establish their IMCs. The option is irrevocable. 7

8 Composition of constituent grants 15. Where necessary to reflect the changing educational needs, PS(Ed) may amend the constituent grants under the EOEBG, such as adding new grants for new education initiatives, deleting obsolete grants, subsuming school-specific grants into the Basic Provision (A) and/or the Average Per Class rate (B) or vice versa. Accounting arrangements 16. Schools are required to keep a separate ledger to clearly record all the income and expenditure chargeable to the EOEBG. While the demarcation of the General Domain and Special Domain is removed, schools are advised to take into consideration that schools may be required to report on the expenditure specified for programmes under certain school specific grants like Capacity Enhancement Grant. As such, schools are also advised to keep separate sub-ledger for all school specific grants so as to facilitate reporting requirements, where necessary. Payment Schedule 17. Generally speaking, the annual provision of the EOEBG will normally be released to schools on a quarterly basis in September, November, February and May. Each payment shall normally be of an amount equivalent to three months provision. For certain school specific grants where the level of provision cannot be ascertained at the beginning of a school year or in the event of overpayment, adjustment or other special circumstances, the payment schedule and the amount of payment will be adjusted as appropriate. 18. In view of the fact that schools may establish the IMC at different times, the initial payment arrangement is as follows: a. For existing aided schools with IMC established between 1 September and 31 July of current school year, the EOEBG payment will start to be provided in September of the next school year and no OEBG will be paid in August. b. For existing aided schools with IMC established between 1 August and 31 August, the schools will then receive the subsidies in August based on the OEBG formula. In November, the difference between the subsidies under the OEBG and EOEBG formula will be adjusted and then be shown on the EOEBG Allocation Advice sent to the schools. c. For new schools with IMC starting operation in September, the EOEBG grant will be paid in September of the first school year of operation. 8

9 Surplus retention 19. Schools may retain a maximum amount of surplus of up to twelve (12) months provision of the EOEBG for the current year (excluding funds set aside as outstanding commitment for the payment of Severance Payment/Long Service Payment for staff as mentioned in paragraph 9 above). PS(Ed) may under exceptional circumstances agree that individual schools can retain surplus in excess of this level. Accountability 20. The implementation of the EOEBG gives schools greater autonomy in deployment of resources and, in turn, the delivery of education to their students. The quid pro quo to such autonomy is that schools have to be more transparent and accountable to the community for their performance and the use of funds. Schools must establish an accountability framework under which there are sufficient checks and balances to guard against any untoward developments. Two of the key elements of a proper accountability framework are schools internal self-regulation and external monitoring. Self-regulation takes place through annual planning, budgeting and review by the schools themselves. 21. For external monitoring, schools are required to disclose financial information properly in their annual School Plan and the annual School Report, which are to be uploaded onto the website of the schools. In addition, the IMCs are also required to submit to EDB their annual accounts including the information as required by EDB, which will have been audited by a certified public accountant (practising) as defined in the Professional Accountants Ordinance (Cap. 50). 22. An IMC of a school is responsible for the proper management, administration and operation of the school. It handles funds and assets received from the Government in the capacity of a trustee. Therefore, it is obliged to hold accountable for any improper use of the public resources. Support 23. To support the IMCs in stepping up their accountability mechanism in the wake of increased funding flexibility, reference materials on financial management are uploaded to EDB homepage at Corner for IMC Schools. 9